CFS focuses on adviser compliance

Colonial First State (CFS) is investing $430 million over five years into the business with aspirations of becoming the easiest provider to do business with for financial advisers.

The investment followed the announcement that CFS was now a standalone business after the Commonwealth Bank’s (CBA’s) 55% stake had officially been sold to private equity firm KKR on Wednesday.

Speaking to Money Management, CFS chief distribution officer, Bryce Quirk said the investment would focus on modernising its systems, platforms, and processes.

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“We've set some pretty high aspirations for ourselves in this business, we do want to be the most competitive superannuation and investment business in Australia. We don't want to just compete, we want to be the best,” he said.

“As a result of that significant investment, we've got a big responsibility as a leadership team, and through my colleagues and my own team members, to now execute on that.

“We're making a commitment to the market that we're going to be more responsive, more nimble, and more customer focused. Ultimately, we have the goal of being the easiest product provider to do business with because we think if we can do that, then advisers will see the value in what we're delivering.”

One component of the funding would be used to separate CFS from CBA’s systems, but the majority would be used of the backend of both FirstChoice and FirstWrap platforms.

CFS looked to release a new platform that would initially run in parallel to FirstWrap at the end of next year.

“We've already spent a good 12 months working through a process of understanding vendors in the market,” Quirk said.

“We expect to be making some announcements around that in the coming months around who were partnering with, what is the functionality we will deliver and the timeframes as we deliver those to market.”

Eventually, FirstWrap would be integrated into the new platform.

On FirstChoice, CFS would focus on digitising some of the manual processes that sat behind it.

“We know from speaking with advisers that one of the biggest challenges they face is the compliance burden, so we’re investing in becoming far more efficient and the easiest partner to do business with, helping to reduce the administrative burden so that advisers can spend time doing what they do best – advising their clients,” Quirk said.

Quirk noted that CFS looked to better integrate CFS platforms with financial advisers’ own software and tools that would in turn lower the cost of delivering advice. However, the challenge was bringing all those technologies together.

“It's certainly a case of us integrating and building the layers within our products that allow us to share the data securely between those parties. So, there'd be no onus on the advisers to make any investments or material changes, he said.

Given KKR would own 55% and CFS 45%, Quirk said the two shareholders would be active in a governance capacity but that the executive team would run the business.

“Ultimately, they’ll both have representation in a corporate board capacity. But of course, we also have our superannuation board where we have our responsibilities to members and the independence that that brings to our decision making as well,” he said.

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Does any Adviser trust a word CBA say about helping Advisers ? Nah, thought so.
Bet ya KKR strip costs out to the bare bones, call centre staff are totally replaced by net bots and Real Adviser services plummet.
But KKR will flip it onto the ASX before advisers have time to get clients off the platform.
A win for CBA & KKR, a win for Advisers …….. only in some BS tabloid headings.

I 100% guarantee you failed FESEA at least twice - did you even read the first sentence of the article? There is 430mil being invested into the business.

You are probably an anti-vaxer too.

Oh someone’s a bit testy last night.
Yep a nice tabloid headline for Advisers.
After treating Advisers like dog poop for at least the last 3 years, there is no trust left and a flashy announcement doesn’t cut it.
Bet ya I’m right, how much should we bet ??
PS - Relevant Degree qualified, Fully FARSEA qualified, exam done 1st go and doubled vaxed too bro :-)

It will be a tough gig to come back from treating advisers like rubbish for 3 years and now saying we will be the best. Mistakes, lies and zero advisers focus has put this name from the best to the worst in the business. If it wasn't for the mandate and CGT there would be no money left to manage. For the industries sake I hope they get is right but without a clean out it seems very unlikely.

Bryce Quirk needs to resign. CFS once was like, Elle Macpherson, the late 1980's and Coca Cola all wrapped up into one. It was pretty awesome....... Now CFS is like that half drunken Coke drink, left over at the very end of a long hot summer Barbecue party....pretty flat, disgusting and awful.

They have a long way to go. Over the last 2 years I have moved all my clients away from CFS. A large part of the decision to stop using them for new clients was their compliance forms and processes.

Some real negativity towards CFS in the comments here. I'm surprised, they definitely have some outdated technology but apart from that it's still the cheapest mini-wrap style product going around and still has great service levels. I'd be interested to know where people have moved their clients too because you're SOA would need to be disclosing that you are putting them in higher fee product....because there aren't any that are cheaper.

My guess is they buy Panorama and transition FirstChoice and FirstWrap to that technology. Instantly solves their tech issues.

Depends what underlying investments you put them into. An admin fee at 0.20% with a higher ICR doesn't always work out cheaper, depending on the balance of the client account. Some SMA's are running at 0.50% all in ICR, tack on a 0.2/0.3% admin fee and it's lineball, if not cheaper.

And I hope for their sake they don't buy BT Panorama, that would create more tech headaches than it would solve!

The investment option is really irrelevant, you can always stick them in an index fund and it will be the cheapest. CFS Index Balanced is 0.35% all up, admin and ICR.

Admin at 0.2% with rebates starting at $100k is the cheapest i've seen.

Who said anything about index funds? These are actively managed portfolios, with direct Aussie and direct International share ownership. That isn’t available on FC. And the investment costs absolutely do matter, when you do your like for like comparison, this pricing for active is not available on their existing product for that price. ASIC and BID are both happy.

Wow imagine some clown saying buy Panorama to solve tech problems.
It has taken Advisers up to 8 registration attempts and 2 years to try to transfer from BT Wrap to Panorama.
Plus Panorama has had times of complete shut down for weeks at a time.
The most useless of them all is Panorama, a race to the bottom for big bank owned admin.
Most of them doing fantastically well being completely useless.

Sounds to me like you complain about everything. CFS hasn't spoon fed me for the past 3 years, they made me get advice fee consent from all the clients I haven't spoken to in years, I had to get the password for my Panorama registration emailed to me twice instead of it working the first time. Time for you to pull the pin and go do something else I reckon.

“they made me get advice fee consent from all the clients I haven't spoken to in years,”
What a shining light you are Brett H, why were you charging clients that you hadn’t spoken to in years ?
Oh yeh that was all the rage in Bank land wasn’t it, FFNS up to the eye balls. FFS your clients must be stoked.

Ha you obviously didn't get the context of my post. I was working on the assumption that you've had a difficult time with CFS over the past few years because you've had to go to your client base and get fee consents signed prior to the start of the legislation on July 1. CFS categorised clients who have not had any adviser related activity on their accounts for set periods of time into priority bands e.g. the adviser hasn't performed any activity on the account for 5 years then they are category 1 and need a fee consent signed immediately. Personally I didn't have to get any fee consents signed in the period prior to July 1, obivously everyone does now.

I have to assume they've asked you to do this because the product hasn't changed, the fees have gotten cheaper, the service standards are the same, what else would lead you to have a sook on a website like this about how they've made it so hard for Advisers.

CFS couldn’t run a chook raffle properly these days, sad to have fallen from a previous good company.
Whether by choice or by neglect they have screwed advisers and their service turned to crap. As has many other bank admin platforms like BT / Asgard.
Getting an FDS signed has never been a problem for us as we actually see our clients at least annually and actually do work for them.
CFS so called category system was as bad as Centrelinks Robo debt, multiple clients of mine with multiple Advisers contact and Adviser actions got caught in CFS pre legislation admin FDS F##k ups.
Reality is post RC the banks didn’t care for Advisers and services to them. After collectively stealing $5,600,000,000 the big banks & AMP chose to blame advisers and screw advisers rather than the managers, AFSL RM, CEOs etc that over saw the FFNS scandalous thefts. And they are still shifting the blame to Advisers.
Now CFS say they want to be all about helping Advisers, myself and others here say BS. No trust left, don’t believe it.
How much was that bet that costs get stripped out, net bots services will be the go and KKR & CFS will flip it onto ASX. How much are we betting ???

And where were our professional bodies when the advisers were turned on by the very companies they helped build? Still hoping to get the juicy code monitoring body contract. Rot in hell.

I think Macquarie is already circling that one.

We'll see how this plays out but I'm quite optimistic about this change for CFS. Call centre and BDMs are some of the best, just need to improve some of the processes.

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